Updates in the Law
The new legislation signed into law by President Biden, known as The American Rescue Plan Act of 2021, has important COBRA provisions that apply to self-funded and fully insured group health plans. The law also contains important provisions that apply to dependent care assistance provided through an employer’s Section 125 cafeteria or flex-choice plan.
The law’s COBRA provisions provide employees:
The subsidized COBRA premiums will be advanced by employers or their insurers and will be recouped by a tax credit.
The COBRA changes become effective April 1, 2021. Employers or their COBRA administrators need to revise their COBRA notices and must send notice of the right to elect COBRA coverage and receive COBRA premium subsidies to certain COBRA eligible individuals and dependents. As such, employers should begin determining which employees and dependents may be eligible for the COBRA extended election period and premium subsidies.
The law’s dependent care provisions provide employers:
The increased dependent care benefit limits are not mandatory but, if elected, they do necessitate a plan amendment. The amendment can be adopted as late as the last day of the plan year, with retroactive effect. Participants, however, should be notified of the increased limits as soon as possible.
If you have any questions about how these changes may impact your company and its employees, please do not hesitate to contact Mark Pieper at firstname.lastname@example.org or 402-492-9200.